New legislation would allow Lordstown Motors Corp. to sell Endurance direct to fleet customers
LORDSTOWN — New legislation specific to Lordstown Motors Corp. would allow the upstart automaker to sell its electric truck, the Endurance, direct to fleet customers.
Ohio law now generally does not allow direct vehicle sales, but a measure introduced by Republican lawmakers Mike Loychik of Bazetta and Michael Rulli of Salem carves out an exemption for Lordstown Motors to bypass the traditional dealer system.
“The genesis behind it is Ohio built, to Ohio strong, to Ohio Endurance,” said Rulli, during a Wednesday news conference at the statehouse in Columbus.
Lordstown Motors general counsel Thomas Canepa said the trucks would be sold in batches to customers buying for fleet use. Fleets have teams of mechanics and repair regimens, Canepa said, which is a reason for this business model.
The vehicles will not be available for consumer purchase for a couple of years, as the company is focusing on meeting the commercial demand, ranging from utilities, municipalities to service companies.
The proposed carveout would not hinder auto dealers, said proponents of the legislation, because Lordstown Motors does not have a dealer network.
“Our model doesn’t work for the traditional franchised dealer partnership so this narrow legislation simply allows us to sell our fleet-focused and Ohio-made vehicles in Ohio,” Canepa said.
There are rules in Ohio about how vehicles are sold, Loychik said. But he said electric vehicles “are different;” therefore different sales models are needed.
The legislation proposed Wednesday “very specifically applies to sales of electric vehicles in Ohio,” Loychik said.
Zach Doran, president of the Ohio Automobile Dealers Association, issued a statement on behalf of the state’s independent new car and truck dealers.
“We look forward to working with the General Assembly to ensure a thorough understanding of the economic, consumer and community benefits of Ohio’s longstanding system of independent, locally-based new car and truck dealers,” Doran said.
Other major auto manufacturers, such as Honda, Ford, Chrysler and GM, “operate successfully within” Ohio, and are “investing heavily in the development and production of electric vehicles” that will continue to be sold by independent auto dealers, Doran said.
Rulli said the legislation narrowly targets Lordstown Motors based on language of the product being Ohio-owned and Ohio-manufactured. He said he wants the dealership association at the table the whole time during the conversation on the legislation.
Lawmakers in 2014 carved out an exemption for electric vehicle maker Tesla to sell direct to consumers, but with the caveat the company operate three dealerships in Ohio.
If the legislation stalls, Lordstown Motors could sell direct to consumers in another state, said Chris Kerzich, director of government relations and corporate affairs for Lordstown Motors. There are 17 to 19 in the U.S. that allow it, said Rulli, but that route means Ohio would lose millions in taxes.
The Endurance will be the first electric pickup truck to be manufactured and sold in the United States. Lordstown Motors, which bought and is retooling the former General Motors assembly plant in Lordstown to make the Endurance, expects to launch production in September.
The company has received more than 100,000 non-binding reservations for the truck, which has a sticker price of $45,000 after a federal rebate.
Steve Burns, chief executive officer of Lordstown Motors, said on a pre-recorded video that 500 employees currently work at the plant, and by September another 1,000 jobs will be added when the vehicles are in production.
Canepa built on that statistic, saying that with every job added at the plant, another seven to eight jobs are created.
Throughout the conference, officials referred to the Mahoning Valley, often referred to as the Rust Belt, as “Voltage Valley.”
Burns was unable to attend the conference in Columbus due to robotic welding being performed on the Endurance. “It’s a big step in bringing it to life,” he said in the video.
Nearly $450 million has been invested in the plant, Canepa said.
Lordstown Motors Corp., founded by Burns, owns the 785-acre, 6.2 million-square-foot Lordstown Assembly plant in Lordstown, once run by General Motors.